Think Your Home’s Insured?
“It is not the strongest of the species that survives, nor the most intelligent, but rather the one most adaptable to change.” ~Clarence Darrow
Being the most adaptable means that we first have to recognize the change. Unfortunately, that can be embarrassing and uncomfortable.
For example, after we downsized, built and moved to the mountains, I wanted to ensure that our home was covered for everything. My wife is a former insurance underwriter so I asked her if we were covered against earthquakes. For California readers this may not sound like an unusual or unreasonable question. But, we live on the East Coast and this was in 2006 (before our 5.8 magnitude “earthquake” in Virginia).
“No,” was her answer, adding, “we’re also not covered for floods.” You have to understand that we live 3,000 feet above sea level to get what she was really telling me.
“Could we get coverage?”
“For floods?” Her eyes rolled.
“How much would it run us?”
“Call them. I have no idea.”
My wife handles all the day-to-day bills, policies and contracts—so the ‘you go call them,’ “suggestion,” was very unusual. In the “Marriage Dictionary,” it translates to, “I’m not going to sound like a nut.”
That Monday I called. The agent snickered, “We don’t get an....,” then, not wanting to lose the commission, she quickly changed her verbiage from any to, “many calls for that, I’ll check and get you a price.”
She did. It was twenty bucks a month. The mountains were created by violent collisions of the plates millions of years ago; we had tremors in our old house which woke my wife from her nap on our couch when it shook; we live by a few inactive fault lines—so we got it.
When I’d talk to friends about the economy I’d preface the talk with, “But I’m just extra precautionary, heck I have earthquake insurance.”
After the 5.8 quake, phone calls and emails poured in. Suddenly everyone wanted to know the associated cost to sound like a “nut.”
I was tempted to call my agent and “snarkly” ask her if she gets a lot of calls for quake coverage now.
John Daly of OilPrice.com did a fabulous piece that “Tyler Durden” ran on Zero Hedge titled: “U.S. Government Confirms Link Between Earthquakes and Hydraulic Fracturing”
Note the phrase, “Once the link between the fluid injection and the earlier series of earthquakes was established.”
So both the U.S Army and the U.S. Geological Survey over fifty years of research confirm on a federal level that that “fluid injection” introduces subterranean instability and is a contributory factor in inducing increased seismic activity.” How about “causing significant seismic events?”
After watching the documentary “Gasland” and noting how close we live to Marcellus Shale I suspect our agent will be getting more calls.
Heck, our rates may be going up if the insurance underwriters read the best financial blogs.
But this piece isn’t about earthquake coverage...
Europe is that the preverbal fork in the road. The Eurozone can take the path of printing their way to hyperinflation with 3 trillion Euros or they can lead the PIGS down the currency default trail.
Who knows if their plan is really to dissolve the Euro. It may be just a scare tactic to get the other countries to kick in.
With the banks all “sovereign’d up” with PIIG debt, this really boils down to a question of: Will the pain come sooner or later?
We all know how politicians think. Either way I’m sure the psychopaths like Spencer Bachus are enriching themselves. Funny thing about psychopaths, they don’t necessarily have to cut you up and serve you to their guests, to devour you.
Schweizer: We know that during the healthcare debate people were trading healthcare stocks. We know that during the financial crisis of 2008 they were getting out of the market before the rest of America really knew what was going on.
In mid September 2008 with the Dow Jones Industrial average still above ten thousand, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were holding closed door briefings with congressional leaders, and privately warning them that a global financial meltdown could occur within a few days. One of those attending was Alabama Representative Spencer Bachus, then the ranking Republican member on the House Financial Services Committee and now its chairman.
Schweizer: These meetings were so sensitive that they would actually confiscate cell phones and Blackberries going into those meetings. What we know is that those meetings were held one day and literally the next day Congressman Bachus would engage in buying stock options based on apocalyptic briefings he had the day before from the Fed chairman and treasury secretary. I mean, talk about a stock tip.
While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts.
But enough of the plutocracy and corporatocracy, which I’ve written about here and here. The only thing we need to remember is that a currency crisis will lead to massive social unrest and instability.
This missive is about your Homeowners Insurance. Monday I have another call to make. My wife, the ex-underwriter informed me that most policies don’t cover insurrection.
The Austrian school of economics has a very crisp and historically accurate definition of how a credit bubble ends. According to Ludwig Von Mises:
“There is no means of avoiding the final collapse of a boom brought about by credit expansion.
The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
Will the Euro brings us down like England dragged us into the last Great Depression?
Or will our currency put its second foot over the cliff?
One certainty: Massive bubbles lead to a financial crisis which will lead to currency crises, which will lead to civil unrest.
I wonder if our agent will remember me as the guy who knew the earthquake was coming and now be terrified that civil unrest beckons or will she just suppress her laughter again?
About D Sherman Okst
davossherman @ gmail.com
D Sherman Okst Archive
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